The Indian tech outsourcing industry is facing significant challenges posed by artificial intelligence. According to The Wall Street Journal, the development of AI technology is disrupting this crucial sector, which contributes 8% to the Indian economy, and could lead to a significant loss of jobs.
Data shows that the Indian tech outsourcing industry added only 60,000 new jobs in the past year, marking the lowest growth in over a decade. During the same period, the total number of employees at India's top three tech companies decreased by over 60,000. This trend has sparked concerns about the industry's future.
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Currently, the Indian tech outsourcing industry employs 5.4 million people, with a business scale of $250 billion. Over 80% of the S&P 500 companies outsource part of their operations to India, making the impact of AI on this sector directly related to India's economic development.
Experts point out that AI could intensify the decline in industry labor intensity. Ten years ago, companies needed 27 employees to achieve $1 million in annual revenue, now only 21 are needed. Some believe that global demand for human labor will decrease, but Indian industry executives are also optimistically seeing AI creating new business opportunities.
In response to these challenges, Indian outsourcing companies are actively adapting. Large companies have already begun AI training for their employees to meet future demands for advanced skills. However, India still faces a severe shortage of digital talent, with an expected supply-demand gap of 28%-29% by 2028.
Although the current slowdown in growth is attributed to over-hiring during the pandemic, the industry recognizes that future positions will require higher levels of critical thinking and creative problem-solving skills. The Indian tech outsourcing industry is in a period of transformation, and how to maintain competitiveness in the age of AI will be a significant challenge for the sector.